Tax for ‘super rich’ self-defeating–DOF By Bernadette D. Nicolas
@BNicolasBM
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HE Department of Finance (DOF) has warned that the proposed “super rich tax” bill would defeat its purpose of generating more revenues, as the measure would instead encourage “aggressive” tax avoidance. In a letter to Speaker Lord Allan Jay Velasco, Finance Secretary Carlos G. Dominguez III said that while the wealth tax being proposed under House Bill 10253 could initially lead to gains in tax collections, he cannot support it as the measure would discourage growth and investments in the long run. Diminished investments would
result in far greater revenue losses and fewer new jobs to help Filipinos recover from the pandemic, he said. While the bill’s authors estimate that their proposal will generate P236.7 billion per year, the DOF said it projects a “more conservative” P57.6 billion in revenues, adding that “losses incurred from other taxes are far more substantial.” Dominguez said the bill is also “prone to aggressive tax avoidance because the so-called ‘super-rich’ will find ways of avoiding tax by transferring their assets to different accounts where they can seek tax relief and exemptions, as proven by what happened in other countries that had imposed a similar wealth tax.
“Thus, wealth taxes fail to significantly promote economic equality or create additional fiscal space. Moreover, net wealth taxes often failed to meet their redistributive goals as a result of their narrow tax bases, tax avoidance, and tax evasion,” he said. Under HB 10253, individuals with taxable assets that exceed P1 billion should pay a 1 percent tax, while a tax of 2 percent is imposed on taxable assets over P2 billion, and 3 percent for over P3 billion. Dominguez also said many countries that had wealth taxes before ended up repealing them because of the increased capital mobility and access to tax havens in other countries. Only four countries continue to
implement the wealth tax—Belgium, Norway, Spain and Switzerland, he said. On top of this, he said the wealth tax will be “costly and complex to implement” because this would require additional manpower and costs. According to Dominguez, it would also be difficult to assess all assets held by the rich for subsequent taxation, citing the case of Austria which repealed its wealth tax because it became too costly to maintain. To determine the various aspects of a “super-rich” taxpayer’s wealth, Dominguez said there would be a need to relax the Bank Secrecy Law and forge exchange of information agreements with other countries. See “Tax,” A2
STUDY: PRODUCTIVITY
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Monday, November 22, 2021 Vol. 17 No.45
P25.00 nationwide | 2 sections 18 pages |
LOSS FROM COVID AT P2.3T DTI to issue SRP for Noche Buena items soon
By Cai U. Ordinario
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@caiordinario
ONG-RUN productivity losses from direct and indirect health impacts of the pandemic reached P2.3 trillion, according to a study released by stateowned think tank Philippine Institute for Development Studies (PIDS). In a discussion paper, PIDS Senior Research Fellow Valerie Gilbert T. Ulep said more than half of this cost is attributed to productivity losses linked to Non-Covid morbidities due to lack of health care. Based on Ulep’s computation, P1.7 trillion of these losses can be attributed to non-Covid morbidities while P398 billion are due to non-Covid deaths due to the lack of health-care services. “Of the total long-run cost, indirect health impact accounts for the majority. This reinforces the need to address the indirect health impacts of non-Covid patients as a critical component of the pandemic response,” Ulep said. Based on the data, Ulep said only P160 billion are attributed directly to Covid-related premature deaths and morbidities, including long-Covid. This is composed of P94 billion for Covid premature deaths and P66 billion for Covid-morbidity, including long-Covid. “In addition to the direct mortality and morbidity cause by Covid-19, policy approaches to control the spread of the infection have led to unintended consequences, that is, of foregone hospitalization and
By Tyrone Jasper C. Piad
@Tyronepiad
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AS night time falls at Quezon Memorial Circl— one of the big parks where people freed from strict lockdowns have flocked the past week—only colorful lights are seen. The reason: the Quezon City local government prohibits people from staying at the park after 5 p.m. as part of standard health protocols. NONOY LACZA
GREEN-LIST LEISURE TOURISTS GREEN-LIT‘BEFORE DEC’ By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
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OU R ISM st a keholders welcomed the reopening of the Philippines to international travelers from Green List countries, as government cut the new quarantine schemes for vaccinated and unvaccinated passengers. Tourism Congress of the Philippines president Jose C. Clemente
III told the BusinessMirror, “After almost two years, we are very pleased to know that foreign visitors from the Green List countries will soon be allowed to enter the Philippines without need for a quarantine period. We hope that this is the start of the revival of the tourism industry moving forward.” He added: “We also continue to remind our stakeholders to not let their guard down despite the eased conditions. The pandemic is
still around and we reiterate our call to continue observing health and safety protocols to ensure that we can remain open.” On Thursday, the Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF) approved in principle the entry of fully vaccinated tourists from Green List countries/territories/jurisdictions. Guidelines on their arrival are still being finalized by the Special Technical Working Group on Travel, with
sources averring that the target reopening is “before December.” (See, “PHL to open borders to fully vaxxed tourists from green-list nations soon,” in the BusinessMirror, November 19, 2021.)
Shorter quarantine for balikbayans
THE Department of Tourism (DOT), meanwhile, welcomed the IATF’s decision to shorten the See “Green-list leisure ,” A2
HE Department of Trade and Industry (DTI) will soon release the list of suggested retail prices (SRP) for Noche Buena goods soon. DTI Undersecretary Ruth Castelo said in a recent virtual briefing that the department will only include on the list those products the prices of which were kept the same or even lower. Out of 154 products, 94 will have the same price from last year. The prices of 21 items were brought down by the manufacturers, she noted. Castelo said the SRP list will include pasta, sauce, fruit cocktail, cheese, ham and creamer, among others. “So good news iyon para sa mga consumers natin na maghahain ng Noche Buena sa Pasko [It is good news for consumers who will serve Noche Buena items this Christmas],” she said. DTI Secretary Ramon Lopez previously said that the Noche Buena prices are “relatively stable.” Lopez explained that price increases are unavoidable but assured the public that they are capped 3 percent. “Mas mababa pa ‘yung 3 percent kaysa sa inflation rate na 4 percent ‘no; so at least magiging manageable iyong pagtaas ng mga ilang produkto [The 3-percent price increase is still lower than the 4-percent inflation, so the price increase is still manageable],” the DTI chief explained. Still related to Christmas purchases, Castelo reminded the public to check the Philippine Standard (PS) mark when buying Christmas lights.
See “Productivity,” A2
PESO EXCHANGE RATES n US 50.3030
See “DTI,” A2
n JAPAN 0.4404 n UK 67.8688 n HK 6.4585 n CHINA 7.8782 n SINGAPORE 37.0857 n AUSTRALIA 36.6156 n EU 57.2096 n SAUDI ARABIA 13.4109
Source: BSP (November 19, 2021)